Please help. The answer is highlighted but I would like some help explaining why it is the answer.

10. Sid Inc. has an item in its inventory, with the following information as at years ended December 31, 2021 and December 31, 2022, respectively: As at year ended Quantity on hand 200 130 Cost per unit $40 $40 December 31, 2021 December 31, 2022 Estimated sale Estimated selling price per unit cost per unit $55 $20 $80 $20 Regarding the adjusting entry that Sid should record on December 31, 2021, and/or the adjusting entry that Sid should record on December 31, 2022, which of the following statements is true? a) Sid should record a $1,000 debit to cost of sales on December 31, 2021, and a $1,000 credit to cost of sales on December 31, 2022. b) Sid should record a $1,000 debit to cost of sales on December 31, 2021, and a $650 credit to cost of sales on December 31, 2022. c) Sid should record a $1,000 debit to cost of sales on December 31, 2021, and no adjusting entry on December 31, 2022. d) Sid should not record any adjusting entry on December 31, 2021, or on December 31, 2022, because estimated sale price per unit is greater than cost per unit on both dates. e) Sid should not record any adjusting entry on December 31, 2021, or on December 31, 2022, because estimated sale price per unit less estimated selling cost per unit, increases to an amount greater than cost per unit by December 31, 2022